China and Russia to invest in Saudi Aramco IPO

Chinese institutional investors and Russian banks are willing to invest in the IPO of Saudi giant oil company Aramco, the head of Russia’s state investment fund said at an energy event in Riyadh on February 14, 2018.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), said, as quoted by Reuters, that there are several investors who would like to invest in the Saudi Aramco IPO, including a number of banks. There is also a Russia-China investment fund through which we can see a major interest in the Saudi Aramco IPO from a number of top Chinese institutions.

The chief of the Russian fund said last month that Russian pension funds were thinking about taking part in Aramco’s IPO which is to take place late 2018. We will see how the IPO process progresses but we can see great interest to invest in the Aramco IPO both from Russia and China, said Dmitriev.

Saudi Arabia is planning to sell 5% of Aramco in what would be the world’s largest IPO in history. Saudi officials said Aramco was worth $2 trillion, so a 5% deal could get the country as much as $100 billion.

In addition to potential investments in Aramco IPO, the Russian Federation is also planning multi-billion deals with the Saudi investment fund, including partnerships and projects with Aramco, said Dmitriev.

RDIF and Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), formed a partnership to invest in projects in the Russian Federation in 2015 which could strengthen economic, trade, and investment co-operation between the 2 countries.

Last year, PIF and RDIF formed the Russia-Saudi Investment Fund (RSIF) to pursue investment opportunities, mainly in Russia, and in joint ventures which would facilitate Saudi Arabia’s economic diversification. The total committed capital of the fund is US $6 billion.